Major Economic Issues In Puerto Rico
Puerto Rico is a beautiful island located in the east of the Greater Antilles, between the Caribbean Sea and the Atlantic Ocean. It is well known for its tropical atmosphere and regional coasts. The island is a U.S. territory and is currently afflicted with strong economic threats.
The government of Puerto Rico, located in the capital of San Juan, is struggling with a National debt of $72 million dollars. The majority of Puerto Ricans are asking themselves where the government is going to invest that percentage of money and how will it affect their employment, health care, and education. Foreign companies will not contribute with any investment, until there is a sustainable balance between compromise and execution.
The government in the island is divided into three branches: the Constitutional Executive, the governor, the Legislative system, which in fact is bicameral, and the Judicial system. The actual responsibility of the governor, Alejandro Garcia Padilla, is to reinforce the situations within the economic establishments, primarily focusing on job opportunity, and educational progress. During this social-economic situation, the governor traveled to Washington D.C. to gain resolutions in order to find a new reform of financial stability to solve this unbalanced crisis in the island. The democratic representatives from the island advocated strongly to find resolutions from the U.S Congress. The proposal consisted of a division of negotiations to secure commonwealth, financial control, and fiscal order.
Consequently, the first movement, which caused the economic crisis, was the increasing of unemployment, diminishing the production in the market. Companies began dismissing employees because of the economic debt the government gained in 2015. The social revelation was lead by insufficient budget to sustain each employees financial salary. The decision for unemployment was influenced by the distribution of manufacturing and inversion of incentives, due to the effect of the 936 Revenue Code, which operated inversion to the island by the reason of U.S manufactures. As a result, professionals in the island emigrated to the United States to ensure their financial stability and their families.
However, Puerto Rico has a system of social benefits which contribute to the population in terms of unemployment, while Puerto Ricans search for job opportunity. Another factor that influenced the economic confrontation would be the increase of income and taxes on the products sent to the island. Thus, the decision of diminishing the laboral strength in the social structure of the country, college students took the initiative to emigrate in the U.S. and other countries for secure educational opportunities. Right now the government owes $500 million to the University of Puerto Rico. This lead to students holding strikes for their right to attend their university.
In the case of financial management, the value added-tax, also known as the IVA, was one impressive negative effects on the economy by the use of adding the percent of the sales and use tax, known as the IVU, increasing from 7 percent to 11.5 percent during the last year and recently developing in 2016. This action re-estates that the purchase and sale transaction value will pass to different districts of the country, until the services between businesses decide to pay a specific percentage of the value added-tax. In the sense of this cause, financial management in public institutions influenced the amount of increment in the public debt. Representatives and economists claim how the government needs to organize the financial budget due to the control of different institutions and agencies.
Evidently, Puerto Rico is going through a large crisis, and precisely, that should be the purpose for students to contribute in this social-economic situation. The fact that college students are leaving the country might influence other students to encourage a change in the island. Recently, students in Puerto Rico who are majoring in business administration are collaborating to invest money in companies with the intention to re-create the economic budget to reinforce the economic debt. Even though the government is in with the university, that does justify the education in the island. The education in Puerto Rico is excellent and it prepares students for their long-term goals to make an impact on society. As a student in Florida, my hopes for Puerto Rico increase everyday because with the opportunity of studying in the United States, I will be able to create ideas for a change in my homeland.
